How interesting is that? Using open innovation to be “competitively unpredictable”. I love that concept. Let’s understand where John is coming from.

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First, have you heard of Psion Teklogix? They make “rugged mobile computers”. Think Blackberry or iPhone, but industrial strength with specialized purposes, hardware, and made to withstand punishment. From an enterprise perspective, the chart below by VDC Research provides some perspective on mobile computing for work. I’ve outlined in red the section where Psion operates:

Psion’s computers are used in a variety of industries for inventory tracking, couriers, field service and other demanding jobs. The company is #3 in its industry (Motorola occupies the top spot). A key part of Psion’s strategy is to make its rugged mobile computers modular and customizable. This customization allows them to be adapted to different uses. Building on this modular and customization philosophy, the company has developed an ecosystem of third party vendors who make components that plug in with Psion’s products.

I had a chance to talk with Todd Boone, Director of Market Development for Psion. He described the company’s open innovation efforts.

Pace of Change in Mobile Has Accelerated

Before talking about open innovation, first understand this. Todd Boone noted that the pace of change of mobile computing has accelerated in the past several years. Anyone tracking the space probably gets that intuitively. This means is that the uses of mobile, the emergence of new competitors and the changes in technology change more frequently. As an example, on the consumer side, how long have Apple and Android been so influential in the mobile sector?

Indeed, VDC Research noted the changing dynamics of the rugged mobile computing market in a recent article:

Another critical challenge facing rugged handheld vendors is the increasing level of competition from smartphones and other emerging devices – especially for field mobility applications. While smartphones do not have the same level of integrated I/O capabilities nor the level of ruggedness offered by rugged handheld devices, their proliferation in the enterprise (and lower adoption cost) are making them target devices to support more sophisticated enterprise applications. Plus, in the field mobility market the rugged handheld community is most challenged from an OS perspective. Although there is a strong application and developer community supporting field mobility applications on Windows Mobile devices, customer expectations in terms of user interface and experience – especially for field mobility applications – is increasingly influenced by consumer oriented smartphones.

For companies operating in the mobile space, such dynamics make it harder to “know” everything, and to have the resources to respond accordingly. Nimbleness and flexibility are needed to address the unpredictable course the mobile sector takes.

As Todd Boone explained to me, Psion needed a strategy that leveraged their modular platform strategy while recognizing they can’t realistically know all the emerging use cases and technologies out there.

Answer? Open innovation.

Ingenuity Working

On March 4, 2010, Psion launched Ingenuity Working (IW), a site built to expand its open innovation activities. Psion CEO John Conoley described its mission this way:

The open, online community in Ingenuity Working brings us closer to our customers and their thoughts and will allow us to socialise and commercialise innovation. We are using social media to bring our developers and resellers together with our customers, all over the world. Essentially, everyone will be putting their heads together to help create technology that best fits a company’s individual requirements – that has to be a good thing.

In talking with Todd, I learned that the initial thrust of the IW community is focused on partner vendors, rather than direct feedback from end-user customers. In some ways, this is similar to P&G’s open innovation approach.

Engagement with external parties occurs via discussion forums, blogs and a “secure zone” for each partner. In these arenas, there is a two-way exchange of product ideas and use cases. An example can be seen in the section of IW devoted to discussions for developers of Windows/CE/WM/Embedded.

Now that’s some esoteric stuff there. But here’s the thing. It’s groundbreaking in the rugged mobile computing industry to have this all ‘hanging out there’. It becomes free research for competitors too, in a way. Which one may view as a risk of this whole endeavor,

Rather, we think it’s the opportunity to drive the market to a new reality. A market that drives itself in a way that is inherently beneficial to customers and partners alike based on the real-time, open dialogue that starts prior to any development activities taking place and continues through to product maturity. Real success will come, I think, when marketing and engineering no longer make product decisions but rather our community of customers, partners and developers does.

Psion is early in its open innovation initiative, and plans to improve and evolve its program. The company is engaging partners on hardware, software, standards and a wide variety of use cases. These efforts complement its existing offline channels and research.

Becoming Competitively Unpredictable

Finally, that great quote from Psion’s CEO about embracing open innovation to be competitively unpredictable. I asked Todd for a bit more context. What exactly does that mean?

He noted that typically, large companies describe their roadmap for the next several quarters or years in terms of product development. The challenge with that approach is that it’s company-centric, and its effectiveness is limited by the increasing rate of change in the industry.

The other dynamic is Psion’s orientation toward creating an open platform that can be configured for different uses. This platform philosophy is a core strategy.

So by engaging with external parties, Psion is looking to (i) stay on top of emerging market changes; and (ii) leverage this large collective intelligence to develop applications and hardware for its configurable platform.

Ideas which would be hard to forecast out over the next 6, 12 or 24 months. If you’re a competitor, this makes it harder to know what Psion will do.

The idea of bringing customers into the process of defining the products and service of your organization is one that is gaining a lot of steam. One manifestation of that is the increased interest in Social CRM. In this scenario, companies engage their social customers for feedback and marketing purposes. Taking it a step further, Mark Tamis and Esteban Kolsky see the higher purpose as organizing the business around the newly social customers.

Stefan is a leading open innovation consultant and author of the recently published book, The Open Innovation Revolution. He sees things advancing even further. From page 13 of his book:

Open innovation is about integrating external partners in the entire innovation process. This should happen not just in the idea or technology-development phase but also in all other phases toward market acceptance. User-driven innovation is great because it directs your innovation efforts toward market needs. Open innovation takes you to the next step by providing more opportunities through external partners as you address those market needs.

Stefan is on to something. To illustrate his point, I put together these two graphics, based on a hypothetical product delivery value chain. The first graphic might be properly termed, “lightweight open innovation”:

User-driven is highly related to open innovation, but it has to go further to become open innovation. This happens when you not only get ideas from external sources but also let external players become key players in the process of turning ideas into a business.

The Value of Open Innovation

And what is the value of taking open innovation to a more integrated, advanced level? Procter & Gamble illustrates the benefit. In 2000, P&G CEO A.G Lafley set a goal of having 50% of the company’s products derived from external sources. To accomplish this, the company consciously engaged external parties through its Connect + Develop initiative. Through Connect + Develop, P&G conducted a two-way exchange of ideas and feedback with industry, leveraging a dedicated staff of over 50 people. The results?

In 2000, the success rate of new products was 15-20%. By 2008, the new product success rate rose to between 50 – 60%. (pdf)

R&D investment as a percentage of sales is down from 4.8% in 2000 to 3.4% in 2006. (link)

The company attributes its success to its open innovation model. And the advantage continues. Diversified, globally-based P&G’s stock price is up 7% over the past 5 years, while the diversified, globally-based businesses of the S&P 500 are down 2%. That’s a 9 percentage point spread.

P&G sees a key benefit of its ambitious open innovation model as this: to be the preferred partner of choice when external parties have a good idea. Think about that. The volume of good ideas that can occur outside your organization is significant. When individuals, academics and industry players do have these ideas, who’s at the top of their mind for partnering? That’s a significant, sustainable competitive advantage.

The Open Innovation Revolution looks at a number of aspects companies need to address to integrate open innovation more fully into their company’s processes.

It Starts with a Vision and Planning

The initial steps are crucial for establishing an open innovation strategy. Stefan observes that you only get “one-and-a-half chances to do this thing right”. So what are the key considerations for organizations considering open innovation?

Establish a clear mandate, a strong strategic purpose and an ideation theme

His book addresses each of those elements. He also includes examples of companies (often Danish) incorporating these steps.

The step that most resonated with me is the first one, establish a clear mandate. When this is done, it moves the initiative from an interesting suggestion to an approach supported culturally, with processes, management buy-in and identified key players.

But it’s also the hardest and is less amenable to bottom-up experimentation. I say that as someone who has read the value of bottom-up viral adoption and experimentation in the Enterprise 2.0 world. If an organization is going to engage external parties in the co-creation, co-development process, you’d better make sure you’ve got legal and senior management signed-on.

And Stefan emphasizes the issues that will be faced internally at companies as they seek to establish their open innovation mandate. A favorite term of mine is “corporate antibodies”. These are the people inside an organization that will seek to sabotage an open innovation initiative. Why?

They don’t see the effort as 2+2=5. For them, it’s 2+2=2

Essentially they fear having their own projects derailed, and potentially losing their power inside the organization. This is where senior management needs to push the effort, and even crack a few skulls if needed. Here’s how Stefan relates it (page 32):

Mads Clausen, former CEO at Danfoss, was very good at taking managers aside and looking them straight in the eye while telling them that he really believed in this innovation initiative and that he hoped the manager shared his approach.

Innovation leaders must also educate executives on open innovation and, more importantly, must make the consequences of executive decisions very clear.

In Chapter 8 of the book, Stefan addresses strategies for overcoming corporate antibodies.

People, Networking, Roadblocks, Personal Brand and Time Management

Throughout the rest of The Open Innovation Revolution, Stefan discusses a variety of elements that factor into open innovation success.

With people, he has identified two archetypes: innovation leaders and intrapreneurs. Innovation leaders work at the strategic and tactical level to build the internal platform to handle open innovation. Intrapreneurs work at the operational level on initiatives. Key questions he answers are: how to identify and develop these people?

With networking, he applies concepts of social network analysis. And spends some time talking about how you individually can go about your networking. Networking’s value is in finding new ideas and connecting with people globally, and even internally.

Roadblocks include the corporate antibodies, but other issues as well. Top executives may not “get” open innovation. Also, radical innovation is too high a threshold to seek.

Personal brand is a useful term, and one that immediately puts some people off. One interesting tidbit Stefan notes is that establishing a personal brand is seen as manipulative in many countries, but “less so in the United States.” In the chapter discussing personal brand, he includes some worksheets to help you think about your own.

Time management is no doubt an issue for most of us. He includes Parkinson’s Law, which I hadn’t heard of but immediately recognized as true: “Work expands so as to fill the time available for its completion.” He provides advice and frameworks for better managing time.

Admittedly, the personal branding and time management sections weren’t quite my cup of tea. But my guess is they reflect conversations he’s had over the years with many employees of companies who are figuring out open innovation. For example, remember his note that Europeans and the rest of the world outside the U.S. are reticent about this personal branding thing.

Start Thinking about Open Innovation

An area which I’d like to see more is a description of how open innovation works operationally. For instance, do you have existing personnel lead the interactions with external parties? Or is it better to have external connectors lead the coordination? What are the intellectual property issues to be considered? What are the contractual models for sharing the benefits of the effort?

Perhaps this is fodder for a future book by Stefan. But as it is, The Open Innovation Revolution is a smart, rich introduction to the concepts underlying this emerging practice. Stefan knows his stuff, and readers will come away with a better sense of how to prepare their organization, and themselves, for the coming revolution.

The consequences for BP are profound: A successful capping of the leaking well could finally begin to mend the company’s brittle image after weeks of failed efforts, and perhaps limit the damage to wildlife and marine life from reaching catastrophic levels.

A failure could mean several months more of leaking oil, devastating economic and environmental impacts across the gulf region, and mounting financial liabilities for the company. BP has already spent an estimated $760 million in fighting the spill, and two relief wells it is drilling as a last resort to seal the well may not be completed until August.

Let’s hope for the best. Given the challenges of the previous efforts, it sounds like it will take a monumental effort to stop the leaking well.

Which begs a question…should BP be tapping a larger set of minds to help solve the leaking well? Can they crowdsource a solution?

In a way, they’re already doing it. Sort of. You can call an idea hotline to suggest ways to stop the oil. They even have the number posted on their home page.

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But why not take it a step further? A formal crowdsourcing effort. I’ve heard that the folks at Innocentive asked this on an NPR report. Another vendor also pitched its idea management software, however BP didn’t bite. Spigit hasn’t pitched BP, but would certainly be willing to help.

There are some very good reasons to open it more publicly, and cast a call across the globe for ideas:

Diversity of ideas increases the odds of finding something that will be useful

While no one idea may solve it, visibility (as opposed to private phone calls) increases the odds of finding parts of ideas that lead to viable solutions

The brain power of enthusiastic participants across the globe is a good match to BP’s in-house experts

Potentially a good PR move, as the company demonstrates that it’s leaving no stone unturned to solve the leak

Crowdsourcing has proven its value in other endeavors, such as products, government services, technical problems and marketing. Surely it could do well here. But what might hold BP back? Three reasons:

Little previous experience with crowdsourcing

Deep technical domain experience is required

Site becomes a place for public criticism

Are they valid? Let’s see.

Little Previous Crowdsourcing Experience

If a company hasn’t previously mastered open innovation and crowdsourcing, a crisis is a hell of a time to give it a go. This is far from comprehensive, but I did find a couple examples of BP’s forways in the world of crowdsouring and open innovation.

Headshift wrote up a case study about BP’s Beacon Awards. The internal awards recognize innovative marketing initiatives, and BP created a site for employees to submit ideas and vote on them. This example has a couple elements of note:

It’s an internal effort, where “mistakes” can be made as the company gets comfortable with the process of crowdsourcing

It was for marketing ideas in a time of relative calm, not time-is-ticking ideas during a crisis

BP also touts its open innovation efforts. Open innovation means working with others outside your organization to come up with new ways of tackling problems. In a post on its website, it discusses its work with partners:

The need to work with others to solve tricky problems has most likely been around since humans learned to communicate, pooling their skills to achieve a desired mutual goal. In today’s world, collaboration between partner organisations has become highly sophisticated, particularly so in the energy industry where new challenges abound, be those in security of supply, cleaner energy sources, or the bringing together of different scientific and engineering disciplines to focus on a common problem.

Certainly the oil spill qualifies as a tricky problem.

So BP has experience in crowdsourcing internally on marketing ideas, and in open innovation with academia and industry partners. Not too shabby, and that argues for their having a favorable disposition toward crowdsourcing.

Deep Technical Domain Expertise Is Required

OK, I’ll admit. I have no idea how I’d stop the oil leak. Maybe I could come up with an idea as I give my kids a bath (“so you take the rubber duckie, and move it over the drain…”).

The BP oil leak occurred deep underwater, an area subject to different conditions than oil companies have had to deal with. BP is sparing no level of expertise to fix the issue, reports the New York Times:

Several veterans of that operation are orchestrating technicians in the Gulf of Mexico. To lead the effort, BP has brought in Mark Mazzella, its top well-control expert, who was mentored by Bobby Joe Cudd, a legendary Oklahoma well firefighter.

Didn’t even know one could be a legendary well firefighter. But the challenges of doing this in the Gulf are different. Popular Mechanics has a scorecard of each previous effort by BP to stop the leaking well. Do you remember one effort called “The Straw”? It is capturing a part of the oil, siphoning it to a surface ship. But it’s not without its risks:

The real gamble was in the original insertion—the damaged riser’s structural integrity is unknown, and any prodding could have worsened the spill, or prevented any hope of other riser- or BOP-related fixes.

Given the highly technical nature of these efforts, and the myriad complexities, does it make sense to crowdsource? I’d say it does, in that a proposed idea need not satisfy all elements of risk mitigation and possible complications. That puts too high a burden on idea submitters. Start with the idea, let the domain experts evaluate its feasibility.

Keep in mind that people outside a company can solve technical challenges. Jeff Howe wrote in Wired about the guy who tinkers in a one-bedroom apartment above an auto body shop. This guy solved a vexing problem for Colgate involving the insertion of fluoride powder into a toothpaste tube.

Site Becomes a Place for Public Criticism

If BP were to set up a public site that allows anyone to participate, I can guarantee that some percentage of ideas and comments will be devoted to excoriating BP. In fact, it wouldn’t surprise me if much of it became that. A free-for-all that has nothing to do with solving the oil well leak.

A public forum receiving press attention during an extreme crisis presents angry individuals with a too-tempting target to make mischief. BP could spend more time deleting or responding to comments than getting much from it. The anger is too strong, too visceral on the part of many across the world.

Charlene Li talks about meeting criticism head-on in her book Open Leadership. Perhaps one way BP could handle this would be to set up a companion forum where criticism could be moved to. Keep an idea site dedicated to just that…ideas.

But I can see how BP understandably would not want to deal with such a site, as it potentially becomes a major PR pain on top of the existing maelstrom.

This reason strikes me as the one most likely to keep BP away from a crowdsourcing initiative to complement their other efforts. What do you think? Should BP be crowdsourcing solutions to the Gulf oil spill?

Customers have always been core to companies’ existence. An obvious statement for sure. Customers are the source of cash flow, and have historically been thought of in marketing and transactional contexts.

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But in recent years, we’ve seen the rise of a new way to consider customers. As vital influencers of company activities and strategies. Two popular ways this is taking form are the social CRM movement, and the emergence of open innovation.

If you follow discussions in these developing strategies, you see that there are differing views as to the value of customer feedback. Understanding the different use cases of customer feedback helps organizations to set objectives and expectations appropriately, and to create effective frameworks for engaging customers.

Let’s look at three models for applying customer feedback to innovation.

Customer Feedback and Innovation Objectives

The graph below highlights the three models:

The three objectives on the graph are:

Features – product or service requests

Product’s “job” – understand the deeper purpose your product fulfills

Proposal – putting a new concept in front of customers to understand its key value drivers

The X-axis measures the difficulty of getting feedback relevant to a particular objective. The Y-axis measures the impact on company results for the different objectives.

Some notes on the three models follow. For context, I’m including some ideas proposed by Starbucks customers on the My Starbucks Idea site.

Features

Customers – hundreds, thousands, millions of them – are constantly using your products and services. This makes them well-positioned to suggest future product features and service enhancements. As a customer, you become intimately familiar with a product’s utility, and what else you want to see.

You can see this on the My Starbucks Idea site. Some examples of customer product and service ideas:

Often, I see this type of innovation pooh-poohed, as if it is not worth the effort. I fundamentally disagree with that position. This is the important, block-and-tackle work of serving a large market.

As the graph shows, these individual innovations won’t dramatically change a company’s fortunes. But in aggregate, they become a vital part of the product strategy for companies. Soliciting useful ideas for features is relatively easy.

It is important to remember that no company will blindly follow whatever ideas are suggested. Innovation here is customer-centered, but not majority centered.

Product’s “Job”

The notion that customers hire your product to do a “job” is one I learned from Clayton Christensen. He stresses thinking of what customers need to accomplish, as opposed to thinking of product features or customer demographic segments. This frees your mind to address products differently than as a collection of features.

The challenge is to go deeper on what the customers are requesting. This is where customer feedback is not the final answer. Rather, it’s an important clue as to what “job” your customers are hiring for. Take a look at these five ideas from the Starbucks ideas site:

Now as features go, the ideas above are pretty basic. Keep Starbucks open later. But rather than look at them that way, are they providing clues about the “job” customers hire Starbucks to do?

It’s obvious customers are hiring Starbucks for more than a cup of coffee. Starbucks has consciously built out a more lifestyle-based experience. These requests for nighttime hours are indicators that Starbucks has an opportunity to address a new “job”. Here’s my interpretation of the “job” (yours may be different):

People want the solo intellectual pursuits of reading a book, creative writing, researching or getting projects done on a computer. They could do this at home with their own coffee brew or tea. But there’s something social about being around others, even if you’re not engaging with them. You’re connected to the world, as you view it through the periphery of your mind’s focus.

People want to pursue their individual interests, but do it in a way that let’s them feel connected to larger society, be around kindred types and keep tabs on what is happening.

If you accept that as the “job” that customers hire Starbucks to do at nighttime, then the next activity in customer-centric innovation is to come up with other features of the experience that address the “job”.

This is where Starbucks can suggest new features to customers, based on a better understanding of the “job”. The new features can be put out to the customer community for their feedback.

Proposal

Roberto Verganti describes a “proposal” in his book, Design Driven Innovation. A proposal is a product that is not a linear change in your offering, but represents a radical change in meaning. Many purchases – such as a Starbucks coffee – have meaning beyond the coffee. In fact, I’d argue Starbucks has successfully performed a radical change in meaning with its coffee varieties, “baristas” and lifestyle experience. Much different than say, a Dunkin Donuts or McDonalds coffee.

Verganti also takes a fairly dogmatic position against customer-centric innovation. Rather, he argues for vision-centered innovation. The inspiration and sources for vision comes via learning from networks at the edge of societal change, within your industry and outside it. But it’s not without a role for customers after all. As he wrote recently on the Harvard Business Review:

They need to propose new unsolicited products and services that are both attractive, sustainable, and profitable. It is only within the framework of a vision-centered process that users can provide precious insights.

In this model, customers cannot tell you the new, unimagined things they want. Would anyone have suggested a need for Adobe Acrobat, Turbotax, Facebook or Twitter? But once a company has a new proposal for customers, they can become part of the development process. As Russell Ackoff and Herbert Addison wrote in the Little Book of f-Laws (pdf):

There is no point in asking consumers – who do not know what they want – to say what they want. Many new product and service introductions have been disastrous despite the extensive surveys conducted to show that there is consumer interest in, and intention to buy, such a product or service. These surveys have incorrectly assumed that most consumers know what they want.

Consumers can discover what they want in products and services by designing them. It is in design that people find what they want. Furthermore, consumer involvement in product/service design almost always gets creative results.

Engaging customers to get their ideas for something radically different holds great value here. This is not an exercise in determining market interest – although that might be a side outcome. Rather, it’s a process of getting ideas to flesh out this proposal. Let customers help determine the radical innovation of meaning for a new concept.

Progress on the Open Innovation and Social CRM Fronts

The graph above is really more a spectrum, not a series of discrete models. For example, where feature requests leave off and become input about a product’s “job” isn’t a step function. More part of a continuum. But it’s helpful for discussion purposes to describe three models, because there are differences at different points of the spectrum.

As both open innovation and social CRM progress, think about the implications of these approaches on integrating customer feedback into innovation.

Crowdsourcing continues to grow in popularity and importance across a number of industries. Tac Andersen, at the South by Southwest Interactive event in Austin, took in the buzz there, and notes that crowdsourcing is heating up. Digital strategy, marketing and design firm Last Exit called crowdsourcing a top digital marketing trend for 2010.

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With that as context, let’s discuss the Cisco I-Prize. What’s that? I-Prize is an open innovation competition where anyone from around the world can propose ideas. Specifically, ideas that can be $1 billion businesses. This is the use of crowdsourcing to find major business units. Winning team earns $250,000.

Submission of ideas to the I-Prize site, which is powered by Spigit, runs through April 30, 2010. There are already 597 ideas on the site. Anyone can post an idea, and other people discuss it. You can even request to join someone’s team if you like a proposal enough, and the idea owner thinks you can add value. 32 ideas advance to the semi-final selection round.

One note about how the I-Prize works. Participants get virtual currency to buy and sell shares in ideas. Like a stock market. And 8 ideas with the highest price per share (“People’s Choice”) will advance to the semi-final selection round, along with 24 ideas hand-picked by Cisco officials (“Judge’s Choice”).

So the idea trading will matter.

I wanted to write about five ideas that I found interesting. Will they be $1 billion businesses? I don’t know for sure. But these ideas address current markets that reach into the billions of dollars. And I like some of the edgy thinking that goes into them. Along with descriptions, I’ve included their share price performance charts. Note that to view the ideas, and to trade them, you need to be registered on the I-Prize site.

Patrick’s idea is for students to collaborate and teach one another. Any student can record a lesson on any subject. Other students find this recording, view it and rate it. Top rated tutorials rise to the top.

A key element of his plan is closing the feedback loop. Specifically, how did those who viewed the tutorial perform on their tests? If their performance was above average, the student who uploaded the tutorial gets extra credit.

Because they’ve shown good mastery of the subject, and helped others learn as well.

In a discussion around the idea, Patrick comments:

The other main difference is that my system wants to encourage students to teach each other, not to force them to do so. Not every student is a good teacher, and it should also be possible to achieve the highest possible grade by only learning for yourself. There are, however, students that are very well prepared but fear to be unlucky and therefore want to secure a good grade. In the current system, they mostly try to learn even more(even if they don’t have to) and are not interested in teaching other students. My idea could change that dramatically.

This would be a big help in the education system, distributing the teaching load beyond teachers.

Right now, you can watch a game show, enjoy the contestants’ fumbling around and wonder if you could do better. With this idea, you just may get the chanced to find out. No flying to an L.A. studio to participate. Just sit in front of your PC at home.

This concept wouldn’t need to be limited to game shows. In response to one commenter on his idea, Philip wrote:

Fantastic, i love the idea about real pundits talking about live events.. this could be huge… Post-sports games, let the community be analysts, or political events too…

Man, I could see the sports talk after a game. People would love that.

Cisco currently has technology that helps companies mediate the energy usage of their facilities. What Robert proposes is to extend this into the consumer home market. We can see the power usage, by appliance, at any time via a web interface. And control it accordingly.

Here’s how Robert describes it:

This would give the users who elected to use this service the ability to manage their electricity usage, and truly see what devices in the home were using the most electricity, allowing them to run reports that show historical usage, and the option to set policies that would throttle usage in certain areas, or at least alerting a user if they are going to violate policy (for instance, by virtually running a laundromat in their home one week, exceeding their normal laundry device usage by 300 percent and increasing the high energy usage of devices like the dryer).

Aside from these reports and controls, the home mediator could send alerts when something is amiss for an appliance. I like this idea, and it’s something that’s being discussed out there. Tim O’Reilly noted this at the Web 2.0 Summit last year:

Consider the so-called “smart electrical grid.” Gavin Starks, the founder of AMEE, a neutral web-services back-end for energy-related sensor data, noted that researchers combing the smart meter data from 1.2 million homes in the UK have already discovered that each device in the home has a unique energy signature. It is possible to determine not only the wattage being drawn by the device, but the make and model of each major appliance within – think CDDB for appliances and consumer electronics!

If the cost of the system was relatively low, there seems to be a strong ROI for this. And there are a lot of homes out there.

Virtual reality holds a lot of potential, providing a user with the simulation of experiences beyond her physical location. Estimates put the market size well into the billions of dollars. Areas of growth for virtual reality include:

Healthcare

Defense

Gaming

Learning

Construction and infrastructure

This idea is for a device that provides sensory stimulus in a virtual environment. Combine the physical with the virtual to improve the reactions people have when using virtual reality environments. It envisions delivering these touch sensations: movement restrictions, temperature, pressure, shock. The proposed technology involves servo motors and solenoids, and small cavities with a viscous fluid.

Making what’s virtual more tangible for users strikes me as a really good idea.

Internet protocols now handle many different types of data, information, voice, and video…etc. But what about feelings like anger, happiness, satisfaction, fear, hate or sadness?

The framing of emotions as data to be captured and transmitted. Definitely edgy. And not out of the realm of possibilities. I mean, who would have guess checking in our locations would be so popular?

Ali envisions emotions integrating into the game experience. Imagine you’re playing one of those multiplayer online games. As you see others, you can get a read for the emotions they are feeling. Which is something that would occur in “real life” if you were engaged in fighting a big battle on your imaginary dragon beast.

There is technology out there which can enable this idea. Here’s how Ali describes it:

There are many types of biofeedback sensors available, able to detect such conditions as skin temperature, muscle tension, and pulse. Analysis of a persons voice could be done with a voice analyzer, as a persons voice is rich with information about a persons emotional state. These sensors and other input devices could be integrated into a device that would cover part of a persons body, like a glove or vest. This device would then be connected to a hardware input device and the software that resides on it would perform the necessary analysis and conversions, tying the detected emotions to the character in the game or simulation.

Good stuff, and something I can see the gamers liking a lot.

Crowdsourcing’s Many Flavors

I wrote previously about crowdsourcing and its effect on the design industry. Well, this is an entirely different approach. It rests on the ideas of others. This does not run into the spec work = free work controversy seen elsewhere. Someone might argue, why not start your own company off these ideas? Well, anyone is free to do so, and not propose them here.

But not all of us are itching to shuck it all take on the risk of entrepreneurship. Mortgages, kids, success in current careers…these are factors that would limit one’s interest in striking out on one’s own. Sometimes, you just have a good idea.

There are 592 other ideas on the I-Prize site currently, beside these five. Go see crowdsourcing in action.

At the Open Innovation Summit last week in Orlando, there were a number of companies there discussing their various initiatives for open innovation. What is open innovation? UC Berkeley professor Henry Chesbrough, perhaps the father of the movement, formulated this definition several years ago:

Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology.

At the Summit, several companies expressed their growth related to and/or impact of open innovation:

Given the way these companies described their open innovation efforts, I decided to check out their stock performance. Hat tip to Jackie Hutter for suggesting this idea.

The table below compares the 5-year performance of the companies presenting at the Open Innovation Summit against the S&P 500:

It’s not a clean sweep, but most of the companies have outperformed the S&P 500 handily the past five years. While it’s not all due to initiating open innovation, it appears that you can’t rule out its influence on company performance.

I also argued that only about 10% of all companies are adept enough at open innovation to get significant benefits today. Another 30% have seen the light and are scrambling to make open innovation work and provide results that are worth the bother. I call them contenders.

The other 60% are pretenders—companies that don’t really know what open innovation is and why or how it could be relevant for them.

Looking for growth ideas? See what the firms in this open innovators stock index are doing right.